The lenders are working
valuation and conducting due diligence, although no final agreements have been
reached, they added.

Last month, Reuters
reported that Barclays had been appointed by ADCB to advise on the potential
merger plan.

If the merger goes
ahead, it would create an entity with around $113bn in assets, according to
Refinitiv data, making it the UAE’s third-biggest and the the GCC’s fifth
largest lender.

Plans for the merger
were first announced by the banks in September.

ADCB said at the time
that it was in “exploratory talks regarding a potential merger with Union
National Bank” and had begun “similar and separate” discussions with Al Hilal.

“Both sets of
discussions are currently at a very preliminary stage and may not result in a
transaction,” it added.

Listed banks ADCB and
UNB employ about 7,000 people, while privately-held Al Hilal is estimated to
have about 1,500 employees, the Bloomberg report said.

The potential merger
follows the combination of National Bank of Abu Dhabi and First Gulf Bank last
year to create a lender with $175bn of assets.

The UAE Banks
Federation said in an annual report released in late August that the sector was
still ripe for consolidation given the large number of lenders serving the
country’s 9.54-million population and the pursuit of cost savings.

There were 22 national
banks and 27 foreign banks operating in the UAE as of December 2017, according
to the federation’s report.

Earlier this year, it
was also reported that that the Sharjah government was weighing a merger
between United Arab Bank (UAB), Invest Bank and the Bank of Sharjah to create a
lender with about Dhs66.2bn ($18.0bn) in assets.